IslamicFinance.de

The Hong Kong Monetary Authority announced plans this week to sell $1 billion (Dh3.67 billion) of five-year sukuk, the same size and tenor as its debut issue in September that drew $4.7 billion of bids. Those notes last yielded 2.06 per cent, almost the same as the rate at issue and about twice the level of the government’s similar-maturity non-Islamic securities. While the city government’s AAA- rating will ensure demand, Hong Kong is unlikely to host any corporate offers in the next one to two years as sukuk is seen as an “exotic instrument”. The main objectives of Hong Kong selling sukuk are to demonstrate that the legal framework for issuance in the city is widely accepted internationally and to attract more issuers and investors to the local market.